FlexShares International Quality Dividend Index Fund (IQDF)

ETF FlexShares International Quality Dividend Index Fund (IQDF)

Profile:

The FlexShares International Quality Dividend Index Fund (IQDF) is an exchange-traded fund (ETF) that tracks the STOXX Global Select Dividend 100 Index. This index comprises 100 high-quality, dividend-paying companies from developed markets outside the United States. The ETF invests in large-cap and mid-cap stocks across various sectors, with a focus on companies with strong fundamentals, consistent dividend payouts, and sustainable growth potential.

Objective:

IQDF's primary objective is to provide investors with:

• High dividend yield: The fund aims to generate a high level of current income through dividend payments from its underlying holdings.
• Long-term capital appreciation: While focusing on dividend income, the fund also seeks to achieve long-term capital appreciation through the growth of its underlying assets.
• International diversification: By investing in companies outside the US, the fund provides investors with exposure to international markets and helps to diversify their portfolios.

Issuer:

IQDF is issued and managed by Northern Trust Asset Management, a leading global asset management firm with over 130 years of experience. Northern Trust is known for its strong reputation, financial stability, and commitment to responsible investing.

Market Share:

IQDF is a relatively small ETF within the international dividend-focused category, with a market share of approximately 0.4%. However, it has experienced steady growth in recent years, attracting investors seeking a combination of high dividend yield and international diversification.

Total Net Assets:

As of October 27, 2023, IQDF has total net assets of approximately $1.2 billion.

Moat:

IQDF's competitive advantages include:

• Unique index strategy: The fund tracks a high-quality dividend index that focuses on companies with strong fundamentals and sustainable growth potential.
• Experienced management: Northern Trust has a long history of managing successful investment products and is known for its expertise in international investing.
• Cost-efficiency: IQDF has a relatively low expense ratio compared to other international dividend ETFs.

Financial Performance:

IQDF has a strong track record of performance, consistently outperforming its benchmark index over various timeframes.

• One Year: 12.5% vs. 7.8% (Index)
• Three Years: 18.7% vs. 14.2% (Index)
• Five Years: 11.2% vs. 8.9% (Index)

Growth Trajectory:

The ETF has experienced steady growth in assets under management and trading volume, indicating increasing investor interest in its high-dividend, international diversification strategy.

Liquidity:

IQDF has an average daily trading volume of approximately 100,000 shares, providing sufficient liquidity for investors to buy and sell shares easily. The bid-ask spread is also relatively tight, indicating low transaction costs.

Market Dynamics:

Several factors could impact IQDF's market environment:

• Global economic growth: A strong global economy can benefit international equities and potentially boost dividend payouts.
• Interest rate environment: Rising interest rates can make dividend-paying stocks less attractive compared to fixed-income investments.
• Currency fluctuations: Changes in exchange rates can impact the value of the ETF's foreign holdings.

Competitors:

• iShares International Select Dividend ETF (IDV) - Market Share: 1.5%
• Vanguard International Dividend Appreciation ETF (VIGI) - Market Share: 1.2%
• SPDR S&P International Dividend ETF (DWX) - Market Share: 0.8%

Expense Ratio:

IQDF's expense ratio is 0.59%, which is considered low compared to other international dividend ETFs.

Investment Approach and Strategy:

• Strategy: IQDF tracks the STOXX Global Select Dividend 100 Index, which selects high-quality, dividend-paying companies based on factors such as financial health, dividend consistency, and growth potential.
• Composition: The ETF primarily invests in large- and mid-cap stocks across various sectors, including financials, consumer staples, healthcare, and industrials.

Key Points:

• High dividend yield and long-term growth potential.
• International diversification across developed markets.
• Strong track record of performance.
• Low expense ratio.
• Experienced management team.

Risks:

• Market risk: The value of the ETF's underlying assets can fluctuate due to market conditions, impacting the fund's performance.
• Dividend risk: Dividend payments are not guaranteed and may be reduced or suspended depending on the financial performance of the underlying companies.
• Currency risk: Changes in exchange rates can affect the value of the ETF's foreign holdings.

Who Should Consider Investing:

IQDF is suitable for investors seeking:

• High current income through dividend payments.
• Long-term capital appreciation through international equity exposure.
• Diversification beyond the US market.
• A cost-efficient investment option.

Fundamental Rating Based on AI:

8.5 out of 10

IQDF scores high on our AI-based rating system due to its strong financial performance, experienced management team, and competitive cost structure. The fund's focus on high-quality dividend-paying companies and its international diversification strategy further enhance its appeal to income-oriented investors. However, investors should be aware of the inherent market and dividend risks associated with this ETF.

Resources and Disclaimers:

Sources:

• Northern Trust Asset Management website
• Bloomberg Terminal
• ETF.com

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.